HomeMy WebLinkAboutAdden 1 AMENDMENT NUMBER 1
PUBLIC WORKS TRUST FUND CAG-93-056, Adden #1-07
LOAN AGREEMENT NUMBER PW-5-93-280-040
BETWEEN
THE PUBLIC WORKS BOARD
AND
CITY OF RENTON
WHEREAS, the Public Works Board (hereinafter referred to as BOARD) is authorized to make loans to
BORROWERs pursuant to the provisions of Chapters 43.155 and 39.69 of the Revised Code of Washington, as
supplemented and amended; and
WHEREAS, CITY OF RENTON (hereinafter referred to as BORROWER) desires to amend Loan Agreement
Number PW-5-93-280-040; and
WHEREAS, consistent with its governmental purposes, the BOARD has an established program of lending money
to BORROWERs that, among other things, is intended to (i) minimize borrowing costs to BORROWERs, (ii)
operate with low administrative burdens on the BOARD and BORROWERS, (iii) ensure future participation by
BORROWERs in the program and(iv)provide reasonable loan security for the BOARD and its funds; and
WHEREAS, the BOARD's standard loan agreements contain provisions (the "Acceleration Provisions") allowing
the BOARD, in certain circumstances, to declare the entire remaining balance of a loan made thereunder, together
with accrued interest, immediately due and payable; and
WHEREAS, various BORROWER borrowers under the BOARD's programs believe that the Acceleration
Provisions increase the cost of incurring indebtedness with a lien senior to that of the BOARD's loans and have
requested that the BOARD either modify the loan agreements to remove the Acceleration Provisions or otherwise
agree not to exercise the Acceleration Provisions; and
WHEREAS; the BOARD, after receiving the analysis of its staff and advisors,has determined that the Acceleration
Provisions have increased borrowing costs for certain borrowers and are likely to increase such costs in the future;
and
WHEREAS, the BOARD has rarely invoked acceleration as a remedy against the borrowers under its loan
programs, has various other rights under the loan agreements following a default by a borrower and operates its
programs without requirements that may be associated with a leveraged loan program; and
WHEREAS, consistent with its program of lending, the BOARD desires to minimize the impact of its loan
agreements on the borrowing costs of BORROWERS and to increase demand for its loans; and
WHEREAS, existing remedies contained within the loan agreements, together with clarifications of certain of the
BOARD's existing rights in relation to other creditors, provide protection to the BOARD and its funds which the
BOARD deems sufficient in light of its desire to decrease borrowing costs for BORROWERS; and
WHEREAS, on February 4, 2003 the BOARD modified its form loan agreements by removing acceleration
provisions and adding provisions clarifying the existing right of the BOARD to notify a borrowers other creditors
upon an event of default or other failure to comply with a loan agreement; and
WHEREAS, consistent with its program of lending, the BOARD desires that its loan provisions be generally
consistent and, therefore, desires to amend its existing loan agreements to conform to the modifications of its form
loan agreements; and
WHEREAS, the BOARD has lent funds to the BORROWER and the BORROWER is authorized to enter into loan
agreements with the BOARD pursuant to the provisions of Chapter 39.69 of the Revised Code of Washington, as
supplemented and amended; and
WHEREAS, the execution and delivery of this Amendment has been duly authorized pursuant to proper action of
the BOARD and of the governing body of the BORROWER; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed
precedent to and in connection with the execution and delivery of this Amendment, have happened and have been
performed in regular and due time, form and manner as required by law, and the parties hereto are now duly
authorized to execute,deliver and perform their respective obligations under this Amendment;
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other
valuable consideration, the sufficiency of which is hereby acknowledged, the BOARD and the BORROWER agree
to amend Public Works Trust Fund Loan Agreement Number PW-5-93-280-040as described below:
Section 4.05 Time of Performance is amended to delete the original section and replace it with the
following:
The BORROWER shall begin the activities identified within ATTACHMENT I: SCOPE OF WORK no
later than October 1, 1993, and reach project completion no later than thirty (30) months after the date of
agreement execution.
Failure to perform within the time frame described in the preceding paragraph may constitute default of this
agreement. In the event of extenuating circumstances, the BORROWER may request, in writing, that the
BOARD extend the deadline for project completion. The BOARD may, by a two-thirds vote, extend the
deadline.
The term of this agreement shall be for the entire term of the loan, irrespective of actual project completion,
unless terminated sooner as provided herein.
Section 4.08 Default in Repayment is amended to delete the original section and replace it with the
following:
Loan repayments shall be made on the loan in accordance with Section 4.06 of this agreement. A
payment not received within thirty (30) days of the due date shall be declared delinquent. Delinquent
payments shall be assessed a daily penalty beginning on the thirty-first (3 1) day past the due date. The
penalty will be assessed on the entire payment amount. The penalty will be twelve percent (12%) per
annum calculated on a 360-day year.
The same penalty terms shall apply to delinquent repayment of funds paid in excess of eligible costs as
provided for in Section 4.03.
The BORROWER acknowledges and agrees to the BOARD'S right, upon delinquency in the payment of
any annual installment, to notify any other entity, creditors or potential creditors of the BORROWER of
such delinquency including,without limitation, the state government and the United States of America or its
agencies,credit rating agencies, and the municipal finance market.
The BORROWER shall pay the costs and reasonable legal fees incurred by the BOARD in any action
undertaken to enforce its rights under this section.
Section 4.16 Termination for Cause is amended to delete the original section and replace it with the
following:
If the BORROWER fails to comply with the terms of this agreement, or fails to use the loan proceeds only
for those activities identified in ATTACHMENT I: SCOPE OF WORK, the BOARD may terminate the
agreement in whole or in part at any time. The BOARD shall promptly notify the BORROWER in writing
of its determination to terminate, the reason for such termination, and the effective date of the termination.
Nothing in this section shall affect BORROWER obligations to repay the unpaid balance of the loan.
A copy of this amendment, consisting of 3 pages, shall be attached to and incorporated into the original
agreement between the BOARD and the BORROWER. All other items and conditions of the original
loan shall remain in full force and effect.
IN WITNESS THEREOF, the BOARD and the BORROWER have executed this amendment as of the
date and year last written below.
PUBLIC W RKS B ARD BORROWER
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Kelly Sn der,Assistant erect e Signature
M i cha.�l y a ley
Print Name Date Title
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APPROVED AS TO FORM ONLY Date
This 24"'Day of March, 2003
Christine O. Gregoire C(,I,c t 0� } pnh—n: Q I -tPOD 12..7
Attorney General Fed al Taxpayer Identification Number
By: Signature on File
Jeanne A. Cushman
Assistant Attorney General